Social Security: The Basics of When to Claim Your Benefit

It's a big decision with potentially thousands of dollars at stake over your lifetime. So take your time and think about it.

(Image credit: Copyright Maskot Bildbyra (Copyright Maskot Bildbyra (Photographer) - [None])

Retirees generate their income from any number of sources, which can vary from individual to individual, such as a pension, a 401(k), an IRA or, perhaps, rental property.

But one source of income most retirees have in common is Social Security. That’s why one of the more frequent questions we hear from pre-retirees and retirees is this: When is the best time to take it?

It’s a great question because many people are unaware of just how complex the decision can be. A misstep could potentially cost you thousands of dollars over your lifetime.

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So, when should you take Social Security? I can say definitively and with great confidence that the answer is: It depends.

Yes, I know; not what you wanted to hear. Unfortunately, no one answer works for everyone. But there is information you can gather to help you make a more informed decision.

Start with the Basics

First, let’s establish a baseline of knowledge. You might already know these basic rules, but it’s important to ensure we understand the basics before we head into the more complex.

  • Usually the earliest you can take Social Security is age 62, unless other special circumstances apply, such as widow’s benefits. The advantage to claiming the benefit at that early age is you can have those monthly checks arriving a good four to five years before you reach full retirement age.
  • The downside is that you will receive a reduced amount — about 75% of your full benefit — and that reduction is permanent, no matter how long you live. Also, if you continue to work, the government puts a limit on how much money you can make without being penalized. For 2019, that annual income limit is $17,640. For every $2 you go over the limit, $1 is deducted from your benefit. (You do eventually get that money back after you reach full retirement age.)
  • Let’s say you want to wait until your full-retirement age, though. For most people these days, that’s somewhere between age 66 and 67. At that point, there is no income limit, so you could continue to work at your full-time job with no threat of a Social Security penalty.
  • Finally, you can also delay claiming your benefit, and if you do so, you will be rewarded with larger monthly checks. However, there’s no advantage to waiting past age 70, because at that point the benefit stops growing.

96 Possible Starting Dates

If you do the math, you’ll find that between ages 62 and 70, there are 96 months when you could apply for Social Security, and each of those months would result in a different calculation for your benefit.

So, how can you know which of those 96 months would be the right time for you to make your move? One way is to do a break-even analysis, which helps you compare how much money you would collect over your lifetime by picking different dates to start claiming the benefits. Information on how to do this is available at various sites online, or your financial professional should be able to assist you.

A Few Benefit-Maximizing Strategies

Beyond those 96 options, there are other strategies that potentially can help you add more income to your Social Security checks. A few of those include:

  • Delaying. We’ve touched on this already, but it bears repeating: If you choose to delay filing for benefits, the amount of money you can receive potentially increases.
  • Considering spousal benefits. If you make quite a bit less than your spouse, you might want to claim a spousal benefit rather than your own benefit. The Social Security Administration should be able to tell you which check would be larger for you. To claim a spousal benefit, though, your spouse typically has to already be receiving his or her retirement benefits.
  • Claiming surviving divorced spouse benefits. When you’re divorced, you may not think that your former spouse’s Social Security benefits would have anything to do with yours. But that might not be the case. If your ex-husband or ex-wife dies, you might want to see if claiming this benefit would result in a higher payment for you. If you remarried before age 60, though, this benefit won’t apply.

You can’t count on the Social Security Administration for too much help in helping to maximize your benefits. They can tell you how much your monthly checks will be, or whether you are eligible for a particular benefit, but they don’t offer advice on what the best options are for you.

Your financial professional, though, should be happy to help provide guidance for increasing the odds that you get the highest possible benefit you have earned.

Ronnie Blair contributed to this article.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Oxford Advisory Group are not affiliated companies. The firm is not affiliated with the US government or any governmental agency. Neither the firm nor its agents or representatives may give tax advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 00354394


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Sam Dixon, Investment Adviser Representative
Managing Partner, Oxford Advisory Group

Samuel J. Dixon is managing partner of Oxford Advisory Group ( He specializes in retirement planning and investing for retirees, executives and business owners.